False Promises or Inducements Made to Employees During Hiring Process
As employment lawyers, it is typical for us to assist employees who are terminated from their jobs after many years of working for the same employer, while at other times, we are called upon to assist employees who are terminated soon after starting a new job. In either case, the employee may have a case of wrongful dismissal and a legal entitlement to receive a financial severance package from the employer as a result of the termination.
But what about cases where an employee is terminated soon into a new job after having left a previous employer based on false promises of job security, higher pay, career growth, and so on. This usually happens when an employer wants to benefit from the skills or expertise of an employee, especially in efforts to grow a new start-up company or expand a new business department. In this blog article, we discuss a situation called “inducement” and how it can impact an employee’s legal entitlements upon termination of employment.
What is Inducement?
In employment law, “inducement” refers to a situation where an employer has encouraged or enticed an employee to quit their job to come work for that employer. For instance, to make a job offer seem more appealing during the hiring phase, an employer may convince a prospective hire to accept a new job offer by promising them a significant increase in salary, promotion or perks (e.g., bonus pay or use of a company car).
When resolving a wrongful dismissal case, the courts will often look at the circumstances surrounding the hiring process and, if they find that the employer enticed the employee away from a previously long-term and secure job, it may significantly influence the court’s determination of an employee’s termination entitlements.
Put simply, if the court finds the employer made false promises or representations to lure an employee into accepting a new job offer, it will usually consider the employee’s seniority (years of service) with the previous employer to increase the employee’s reasonable notice period (i.e., enhance the employee’s severance package). In fact, even the Supreme Court of Canada has confirmed that inducement and promises of job security can influence an employee’s reasonable notice entitlement. For instance, in Wallace v. United Grain Growers Ltd., the Court stated:
One such factor that has often been considered is whether the dismissed employee had been induced to leave previous secure employment.. According to one authority, many courts have sought to compensate the reliance and expectation interests of terminated employees by increasing the period of reasonable notice where the employer has induced the employee to “quit a secure, well-paying job . . . on the strength of promises of career advancement and greater responsibility, security and compensation with the new organization”… In my opinion, such inducements are properly included among the considerations which tend to lengthen the amount of notice required.
How long does the effect of inducement last? It will always depend on a court’s discretion of what is fair and reasonable based on the circumstances of each case. Generally, the longer the employee remains with the new employer before being terminated, the lesser the effect of inducement will ultimately be at the time of wrongful dismissal. But this is not always the case. In other words, the effect of inducement is greater if the new job is of short duration (especially if the new job required the employee to relocate). In some cases, the courts have held that the circumstances of an employee’s hiring were still relevant even after 5 years of service. In fact, in the case of Wallace discussed above, the court specifically relied on the employee’s inducement after 14 years of service to support increasing the employee’s reasonable notice period:
“Although the trial judge did not make specific reference to the inducement factor in his analysis of reasonable notice, I believe that, in the circumstances of this case, these inducements, in particular the guarantee of job security, are factors which support his decision to award damages at the high end of the scale.”
How Inducement May Impact an Employee’s Severance Packages
Given that “length of service” is a specific factor the courts consider when determining an employee’s period of reasonable notice in a wrongful dismissal, inducement has the effect of increasing an employee’s reasonable notice period. Therefore, if an employee is induced by aggressive recruiting to leave long-term secure employment and is then quickly dismissed by the new employer, a court in wrongful dismissal claims may award the employee a longer notice period (severance package) than would normally be the case (especially important for employee’s who leave a job after working many years of service with the previous employer).
However, not all statements or actions during the hiring process will support an employee’s claim of inducement. In fact, the courts have held that ordinary acts of “courtship” will not result in a finding of inducement. In other words, an employer’s behaviour must exceed the ordinary level of persuasion that goes into the general hiring process. For example, if an employee was already looking for a job or taking steps to look for new employment, and if the new employer or its agent approaches such an employee, a court may conclude there was no inducement given the employee was already job hunting when the new employer came along. Similarly, the employer’s have rejected an employee’s inducement argument where the employee has specifically negotiated the terms of their employment contract, or agreed to a probation period in their employment contract.
Test for Inducement of Employee
In Ontario, the courts will consider the following factors when determining whether inducement has occurred based on an employer’s recruitment methods (see the case of Firatli v. Kohler Ltd. (c.o.b. Canac Kitchens))
(a) the reasonable expectations of both parties
(b) whether the employee sought out work with the prospective employer
(c) whether there were assurances of long term employment
(d) whether the employee did due diligence before accepting the position by conducting their own inquiry into the company
(e) whether the discussions between the employer and hiree amounted to more than the persuasion or the normal “courtship” that occurs between an employer and a prospective hiree
(f) the length of time the employee remained in the new position, the element of inducement tending to lessen with the longevity of the employment.
Contact Bune Law, Toronto Employment Lawyer
If you are an Ontario employee who recently lost your job after being promised long-term growth and advancement in a new company, it is important to an experienced employment lawyer at Bune Law to discuss your case. By obtaining a consultation with an experienced employment lawyer, you will be able to understand what rights you have following the termination of your employment or wrongful dismissal, especially your ability to obtain greater severance pay (a fair severance package) from your employer on grounds of inducement.
If you are an Employee or Employer who is looking for expert legal advice and representation regarding an employment matter (or workplace matter), our experienced Toronto employment lawyer is here to help you obtain the best possible outcome, including maximizing your severance package. Call 647-822-5492 for an employment lawyer consultation.
While we have successfully fought in court for our clients’ interests, our main goal is to reach a timely and cost-effective resolution through amicable negotiations. Our depth and range of experiencing as an employment law firm allows us to remain firm and assertive in negotiations with employers, while ensuring we approach a solution that respects your legal rights and is tailored to meet your specific needs and objectives.
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